Existence of Equilibria in Matching Models of Money: A New Technique

This paper develops a new technique for proving the existence and indeterminacy of monetary equilibria in money search models with divisible money. Our technique is substantially simpler than standard constructive proofs in the literature. This paper is based on the second half of Kamiya and Shimizu (2002). We are very grateful to the associate editor and an anonymous referee of this journal for their very detailed suggestions and comments. This research is financially supported by Grant-in-Aid for Scientific Research from JSPS and MEXT. The second author also acknowledges the financial support by Zengin Foundation for studies on Economics and Finance.     

ON THE ROLE OF TAX SUBSIDY SCHEME IN MONEY SEARCH MODELS*

This article investigates the roles of policy in search models with divisible money. Recently, real indeterminacy of stationary equilibria has been found in both specific and general search models with divisible money. Thus if we assume the divisibility of money, it would be quite difficult to make accurate predictions of the effects of simple monetary policies. Therefore, in this article, we introduce a certain tax subsidy scheme and show that this is effective in selecting a determinate efficient equilibrium. In other words, for a given efficient equilibrium and for any real number δ > 0 , a certain tax subsidy scheme induces a locally determinate equilibrium within the δ‐neighborhood of the given equilibrium. Moreover, the size of the tax subsidy can be arbitrarily small.     

Schumpeterian patterns of innovation and the sources of breakthrough inventions: evidence from a data-set of R&D awards

This paper examines the relationship between Schumpeterian patterns of innovation and the generation of breakthrough inventions. Our data source for breakthrough inventions is the “R&D 100 awards” competition organized each year by the magazine Research & Development. Since 1963, this magazine has been awarding this prize to 100 most technologically significant new products available for sale or licensing in the year preceding the judgment. We use USPTO patent data to measure the relevant dimensions of the technological regime prevailing in each sector and, on this basis, we provide a characterization of each sector in terms of the Schumpeter Mark I/Schumpeter Mark II archetypes. Our main finding is that breakthrough inventions are more likely to emerge in ‘turbulent’ Schumpeter Mark I type of contexts.     

Impact of Online Customer Reviews on Sales Outcomes: An Empirical Study Based on Prospect Theory

This study examines the influence of the valence of online customer reviews on sales outcomes based on prospect theory. Numerous studies have revealed the importance of customer reviews in online marketing. However, only few studies have explored the impact of online customer reviews on sales outcomes in the dynamic process. Prior studies in behavioral economics literature have indicated that people differently value gains and losses and that losses have more emotional impact than an equivalent amount of gains. This study verifies whether prospect theory applies to the relation between online customer reviews and sales outcomes. Relevant data were collected from Amazon.co.jp, and three statistical models were employed to investigate the relation between the two factors. Major findings confirm that negative customer reviews considerably impact online sales than positive reviews. Furthermore, the findings indicate that the marginal effects of positive and negative reviews decrease with the increase in their volume. The results of this study will enable marketers to compare the relative sales effects of different types of customer reviews and improve the effectiveness of customer service management.     

Residential rents and price rigidity: Micro structure and macro consequences

Why was the Japanese consumer price index for rents so stable even during the period of the housing bubble in the 1980s? To address this question, we use a unique micro price dataset which we have compiled from individual listings (or transactions) in a widely circulated real estate advertisement magazine. This dataset contains more than 700,000 listings of housing rents over the last 20 years. We start from the analysis of microeconomic rigidity and then investigate its implications for aggregate price dynamics, closely following the empirical strategy proposed by Caballero (Caballero and Engel, 2007). We find that 90% of the units in our dataset had no change in rents per year, indicating that rent stickiness is three times as high as in the United States. We also find that the probability of rent adjustment depends little on the deviation of the actual rent from its target level, suggesting that rent adjustments are not state-dependent but time-dependent. These two results indicate that both the intensive and extensive margins of rent adjustments are small, resulting in a slow response of the CPI for rent to aggregate shocks. We show that the CPI inflation rate would have been higher by 1% point during the bubble period, and lower by more than 1% point during the period following the burst of the bubble, if Japanese housing rents were as flexible as those in the United States.     

Utilization of sludge in building material.

Several thermal solidification processes have been developed mainly in Japan. They are lightweight aggregates, brick, interlocking tile, char, and slag. A full-scale plant of them has been successfully operated for more than 10 years. The quality of the end products is better than the traditional ones. They are all substitutive to existing ones. The Japanese experience proves that all the processes are technically feasible, but not economically. Their manufacturing cost is always higher than market price. In addition, they consume large amounts of energy. However, if they are identified for a process of sludge disposal, all of them are worth considering for a big city where there is no place for the sludge to go. The end products can be reused inside the city. A new alternative is "Portland cement". A Portland cement manufacturer accepts sewage sludge, if being paid some amount of money. An average payment is US$100 each 1,000 kg of ash or sludge cake. The Portland cement manufacturer accepts either cake or ash at the same price. It is about 50 to 30% of the energy cost of thermal solidification. The question is which is the better, dewatered cake or incinerated ash, for the Portland cement application. The answer is "it depends on the distance between the sewage plant and the Portland cement plant."     

Is the information produced in the stock market useful for depositors?

The information produced by sophisticated investors in the stock market may be useful for uninformed depositors. Since much information is not produced for Shinkin banks (cooperatives) in Japan, relying on the information from the stock market may be an efficient decision for these depositors. This paper provides empirical evidence that Shinkin depositors seemed to withdraw funds after observing a fall in the stock prices of other banks.     

Semiparametric Model of Hedonic Housing Prices in Japan

We propose a semiparametric hedonic model of housing prices with nonlinearity in age and cohort effects. The model avoids the simultaneity problem among age, cohort and year effects, which is a common problem in linear hedonic models. Applying the model to housing prices in Tokyo between 1990 and 2008 revealed significant nonlinearities in both the age and cohort effects, and significant interactions between these effects, with the shape of the age effect differing across housing cohorts. Estimates of the year effect indicated a declining trend in prices that was more pronounced compared with those of conventional linear hedonic models.     

A new installation for treatment of road runoff: up-flow filtration by porous polypropylene media.

We installed a new device on a paved road to treat runoff from a roadway surface. All the stormwater runoff was transferred into the device and the runoff equivalent to 10 mm/hr or less was treated. The treatment method consists of sedimentation and up-flow filtration with porous polypropylene (PPL) processes. The treated runoff was discharged into the existing storm drainage pipe. The average removal efficiency of the initial runoff at the beginning of rainfall which has high pollution intensity was about 90% for SS, about 70% for COD, about 40% for total phosphorus (T-P), about 80% for Pb and Cd, about 70% for Zn, Cu, Mn and Cr, and about 60% for polycyclic aromatic hydrocarbons (PAHs). The overall removal efficiencies of the experiment that ran for four months remained > 60% of SS, > 40% of COD, > 60% of heavy metals, and > 40% of PAHs. The PPL is excellent for removing smaller size particulates of suspended solids, which originate basically from diesel exhaust, as well as larger size particulates from automobile tires, asphalt roads, and other accumulated source(s) of clay and sand, etc.     

Forecasting Japanese health futures with the BFT : A demand-side approach

In response to the problems associated with supply-side health-care planning, the Institute of Health Systems Development has created a demand-side approach which has been named BFT (Bioforecasting Technology). The system involves integration of data regarding the population, the natural and social environment, and the health/medical/social services with projections on factors that will influence the future population's demand for different kinds of health services. BFT forecasts have proved highly accurate. The system has been used throughout Japan and internationally, and much wider applications beyond standard hospital and health planning are possible.